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Guest Editorial

Killing the Golden Goose

BY DON C. BRUNELL,

Do you remember the Aesop Fable about the goose that laid golden eggs? It is a cautionary tale about greed, and voters in Alaska - as well as the Seattle City Council - should take note.

As the fable goes, an old woman owned a goose that laid a large golden egg each day. The woman could hardly wait for the new day to come, she was so eager to get the golden egg. At last she said to herself, "I will kill the goose and get the gold all at once."

But when she had killed the goose she found that it was just like all the other geese. In her haste to become rich, she had become poor.

Alaska's "golden goose" is tourism, producing revenues second only to the state's oil industry. Some 1.4 million tourists visit the state each year, 70 percent of them on cruise ships. But in Alaska's upcoming primary election, residents will vote on Measure 2, characterized by one newspaper as "revenge against the [cruise] companies."

Measure 2, known as the "cruise ship head tax," would:

• Impose a $46 tax on every cruise passenger visiting Alaska;

• Impose a $4 tax on every cruise passenger to create and fund a new state program in which a state employee would ride on each cruise ship while in state waters to monitor the ship's emissions and regulatory compliance;

• Impose a 33 percent tax on cruise ship gambling revenues while in state waters;

• Subject cruise lines to the state corporate income tax; and

• Require cruise lines to disclose their commissions on shore excursions.

Measure 2 is the brainchild of a California-based environmental group, Bluewater Network, which collected 23,000 signatures to get it on the ballot. They say the tax will raise $50 million a year to maintain port facilities and fund environmental oversight.

But Measure 2 is opposed by hundreds of local governments, chambers of commerce, visitors' bureaus, small and large businesses, and tour operators who say that imposing a heavy tax on cruise passengers will only deter them from visiting Alaska. They point out that Alaska cruising is a billion dollar a year industry that pays almost $43 million a year in taxes and fees to local government.

Critics say that if the head tax passes, Alaska will be the only state in the union to charge people for visiting. They also caution that cruise ships are moveable, and adding $50 million a year to the cost of visiting Alaska could divert ships and passengers to other more welcoming ports of call, such as Mexico and the Caribbean.

Officials in Seattle should pay attention to the Alaska debate because they are about to kill their own version of the golden goose.

The Seattle City Council recently approved a $25 "head tax" on local businesses for every worker they employ. In addition, the Council increased the city's parking tax to 20 percent. The Council also put on the November ballot the largest proposed property-tax levy in the city's history, part of a $1.6 billion tax package to fund street and bridge maintenance.

However, voters are unlikely to approve the huge property tax increase, leaving businesses to shoulder the burden.

The Council sees the higher parking tax as a way to fund street repairs and deter people from bringing their cars downtown. But ironically, they don't see the employee tax as a deterrent to local businesses to locate in Seattle.

The truth is that increasing the cost of shopping and doing business in Seattle will reduce the number of visitors and employers that come to the city, ultimately reducing income to city coffers. Like cruise ships, shoppers and employers are mobile; they can and will go to the more accessible and affordable suburbs if Seattle jerks the welcome mat out from under their feet.

In its zeal to get more gold from the goose, the Seattle City Council may well have cooked its own goose.

Don C. Brunnel is the president of the Association of Washington Businesse

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